Report shows $11M direct loss to VA oyster industry from Gulf spill

A new report from the Virginia Institute of Marine Science
estimates the Deep Horizon Gulf oil spill will cost Virginia's oyster industry
$11.6 million annually in direct economic losses, and total, "water-to-table" losses of
$30.1 million.

Report co-author Tom Murray, of the Sea Grant Advisory
Service Program at VIMS, says the Gulf spill has "disrupted Virginia's seafood
marketplace by virtue of the extensive trade and interdependence in fishery and
seafood products between the regions."

Virginia's oyster industry—hampered by long-term declines in
local oyster stocks due to disease, habitat loss, and overharvesting—has for
decades depended on imports of Gulf oysters to meet demand for local sales and
national distribution.

Murray says the income and cash flow that local oyster
processors derive from processing and distribution of Gulf oysters has
"virtually disappeared" in light of the shutdown of the Gulf oyster fishery
during the three-month Deep Horizon spill. Large areas of the Gulf of Mexico
shoreline in Louisiana, Mississippi, Alabama, and Florida still remain closed
to fishing.

Murray and co-author Jim Kirkley, an economics professor at
VIMS, calculated that Virginia's processors, wholesalers, grocers, and
restaurants have suffered three types of economic losses to related to the Gulf
spill:

Direct losses

Direct losses refer to decreases in "revenues, value-added income, or
jobs" related to the sale of Gulf oysters within Virginia. Murray and Kirkley
estimate these losses at $11.6M.

Indirect losses

Indirect losses occur when the decline in out-of-state revenue
among local oyster businesses forces them to cut back on the purchase of goods
and services from in-state suppliers. Murray and Kirkley estimate these losses
at $1.7M.

Induced losses

Induced losses refer to a slowdown in the flow of new
dollars into the Virginia economy as the households of business owners and
employees reduce their in-state purchases of consumer goods and services.
Murray and Kirkley estimate these losses at $16.7M

Murray and Kirkley note that the spill-related losses come
at a critical time for Virginia's oyster industry, which is in the midst of a promising
but capital-intensive effort to re-establish local oyster stocks through raising
of farmed oysters within Chesapeake Bay and its tributaries.

"Since the Gulf spill," the authors write, "Virginia's
industry has found itself unable to continue to process and distribute products
critical to its established customer base while expending considerable capital
to develop self-sufficiency through emerging aquaculture techniques and
productivity."

Murray and Kirkely warn that unless shipments of Gulf oysters
to Virginia resume quickly, the local oyster industry "may not be able to
financially sustain itself while attempting to recover the full potential of
oyster aquaculture in the Commonwealth."